The Uganda shilling inched down towards the end of the week as interbank demand rebounded, trading at 3660/3670 compared to previous week’ s closing of 3655/3665 .
In the fixed income market, short dated government treasuries firmed with yields falling to 6.999%, 10.300% and 11.847% for 91,182 and 364 day tenors respectively. Record demand at the auction suggests the lure of relatively high yields still outweighs investors’ concern about the country’s fiscal path.
Regional markets
In the regional markets, the Kenya shilling was stable against the greenback in a calm market where supply and demand was evenly matched. Spot market quotes were at 109.55/75.
In global markets, the safe haven dollar steadied as bond yields inched higher but was on the edge against a basket of its major rivals as riskier currencies drew support from calmer sentiment.
In the coming week, the market focus will be on the US Federal Reserve guidance to either maintain its dovish stance or speak to the fiscal and vaccine led recovery as it takes shape.
In the coming week neither bullish nor bearish momentum will hold, market expected to remain flat, however as we get to the 2nd quarter of the calendar year, some pressures will emerge as corporates make dividend payout decisions.
